Shares in ConAgra Foods rose after the US group’s second-quarter profits beat analyst expectations, despite charges associated with the sale of its private-label operation weighing heavy on its bottom line for the first half.
Net income rose for the second quarter ending 29 November to $159.4m against $10m a year earlier, when losses from its own-label arm weighed on the results.
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On an adjusted basis, stripping out the effect of one-off charges, earnings per share came to 71 cents. Analysts polled by Thomson Reuters had predicted an EPS of 60 cents.
ConAgra’s total operating profit for its segments was $493.1m, up 10.1% on a year earlier. The metric excludes general corporate expense, equity method investment earnings, and net interest expense. ConAgra said total operating profit for segments facilitates period-to-period comparison of results of segment operations.
Sales fell 1.4% to $3.09bn as a decline in consumer foods offset a 1% rise in commercial food sales.
Last month, ConAgra struck a deal to sell its private-label business to TreeHouse Foods.
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By GlobalDataFor the first half, ConAgra reported a loss of US$993.2m compared with a $492.3m profit 12 months earlier. Losses were fuelled by a $1.32bn loss from the private-label arm, absent from the results for the corresponding half a year earlier.
Total operating profit for segments increased 15% to $873.4m.
ConAgra said it expects its third-quarter comparable EPS to be “modestly higher than comparable year-ago amounts”.
“I am pleased with our performance in the second quarter,” said CEO and president Sean Connolly. “In our branded business we achieved our objective of delivering strong margin expansion by continuing to focus on price/mix, productivity, and portfolio segmentation. At Lamb Weston, we continued to generate good growth, particularly in our international business.
“We’re encouraged by the progress we’re seeing in advance of separating into two independent pure-play companies, which is a direct reflection of our team’s determination and commitment to perform better and more consistently.”
